USD/CHF climbs despite soft data, NFP report looms

• The USD/CHF is trading higher near the 0.8960 area as the Dollar regains traction despite mixed macroeconomic signals.
• US jobless claims rose to 241,000 and ISM Manufacturing PMI dipped to 48.7, while inflation concerns linger amid Trump's trade policy moves.
• Technical setup leans bullish short-term, with support at 0.8920 and resistance capped near 0.9000 and 0.9040.

The USD/CHF is trading with gains, extending its recovery into the upper 0.8900s after a busy Thursday filled with US economic data and renewed Fed rate cut speculation. Although the ISM Manufacturing PMI and jobless claims reports pointed to continued labor market fragility and sector contraction, the greenback held firm, supported by a stable US Dollar Index and risk-sensitive flows ahead of Friday's nonfarm payrolls report.

US jobless claims for the week ending April 26 surged to 241,000, up from the prior week's 223,000 and well above consensus forecasts. This rise marked the highest level since August 2023 and further reinforced concerns that the labor market may be cooling more than previously thought. Meanwhile, the ISM Manufacturing PMI dropped slightly to 48.7, a marginal decline from March's 49.0. The index remains in contraction territory, with the new orders and production components slowing, while the employment subindex improved slightly from 44.7 to 46.5, indicating a soft but ongoing reduction in factory payrolls.

The inflation component of the survey, measured by the Prices Paid Index, rose to 69.8, suggesting input costs remain elevated and keeping inflation risks on the radar. The market's reaction was balanced: while some risk assets rallied on strong tech earnings, the US Treasury curve remains inverted, and the two-year yield below the Fed funds rate continues to fuel expectations of monetary easing.

Treasury Secretary Scott Bessent reiterated on Thursday that this yield configuration signals the need for the Federal Reserve to cut rates. According to fed funds futures pricing, markets now anticipate over 100 basis points of cuts by the end of 2025. Former Fed Chair Janet Yellen added pressure by warning that President Trump's tariff strategy could have a "tremendously adverse" effect on growth, especially as the trade standoff with China remains unresolved and reciprocal talks remain stalled.

The Swiss Franc remained broadly weaker in quiet European trade as markets remained focused on the US data slate. The Dollar's resilience is also aided by the cautious tone from traders awaiting Friday's US jobs report, which will be key in confirming the recent macro trends and could solidify the next move from the Fed.

Technical Analysis

Technically, USD/CHF continues to edge higher after rebounding from last week's lows. The pair has climbed back above its 10-day EMA and now tests resistance near the 0.9000 round level. Short-term momentum favors the upside, although the broader trend remains mixed. Support is seen at 0.8920, followed by 0.8880 and 0.8840. On the upside, resistance is located at 0.9000 and 0.9040. Sustained strength above these levels would open the path toward the March highs near 0.9080.

With the labor market showing signs of softening and inflation pressures persisting, the next moves from the Fed will be increasingly data-dependent. All eyes now turn to the April nonfarm payrolls report, which could provide the next directional push for USD/CHF. Until then, the pair may remain rangebound but tilted toward modest gains.

Daily Chart